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Biotech / Medical : TRL Total Renal Care

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To: wmj who wrote ()3/9/1999 3:45:00 PM
From: wmj   of 36
 
TOTAL RENAL CARE HOLDINGS (TRL) 03/05/99
Stock Under Pressure; Recommend Purchse

Rating: BUY Change: None 12-Mo. Target: $$low 20's

Total Renal Care shares came under heavy selling pressure yesterday. We met with the CEO and the CFO of the company last evening. Despite controversy from several issues surrounding the fundamentals of the company, we believe the stock is extremely attractive at current levels and we reiterate our purchase recommendation for investors willing to take some risk for the potential of appreciation. For the record, we are lowering our EPS estimate for 1999 from a range of $1.50-1.65 to a range of $1.40-1.50. We believe TRL will achieve the high end of that range, but we are allowing for the possibility that the SEC might require a change in amortization policy that might reduce EPS by about $0.05 annually. Essentially, we assume TRL is capable of, and will adopt a goal of, 20% or better EPS growth from the $1.22 reported last year. (8:30 AM EST)
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